Correlation Between Acrex and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Acrex and Lord Abbett at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Acrex and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acrex and Lord Abbett Small, you can compare the effects of market volatilities on Acrex and Lord Abbett and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Acrex with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acrex and Lord Abbett.
Diversification Opportunities for Acrex and Lord Abbett
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Acrex and Lord is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Acrex and Lord Abbett Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Small and Acrex is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Acrex are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Small has no effect on the direction of Acrex i.e., Acrex and Lord Abbett go up and down completely randomly.
Pair Corralation between Acrex and Lord Abbett
Assuming the 90 days horizon Acrex is expected to generate 0.4 times more return on investment than Lord Abbett. However, Acrex is 2.51 times less risky than Lord Abbett. It trades about -0.23 of its potential returns per unit of risk. Lord Abbett Small is currently generating about -0.38 per unit of risk. If you would invest 1,140 in Acrex on October 16, 2024 and sell it today you would lose (42.00) from holding Acrex or give up 3.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acrex vs. Lord Abbett Small
Performance |
| Timeline |
| Acrex |
| Lord Abbett Small |
Acrex and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acrex and Lord Abbett
The main advantage of trading using opposite Acrex and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acrex position performs unexpectedly, Lord Abbett can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lord Abbett will offset losses from the drop in Lord Abbett's long position.| Acrex vs. Multisector Bond Sma | Acrex vs. Blrc Sgy Mnp | Acrex vs. Transamerica Intermediate Muni | Acrex vs. T Rowe Price |
| Lord Abbett vs. Jennison Natural Resources | Lord Abbett vs. Adams Natural Resources | Lord Abbett vs. Goehring Rozencwajg Resources | Lord Abbett vs. Franklin Natural Resources |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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